Which Stock will give you a Nice Return? Flex Ltd. (FLEX) or The Charles Schwab Corporation (SCHW)

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The shares of Flex Ltd. (NASDAQ:FLEX) and The Charles Schwab Corporation (NYSE:SCHW) were among the active stocks of the last trading sessions. Flex Ltd. (NASDAQ:FLEX) declined to -1.72% closing at the price of $8.57 whereas the shares of The Charles Schwab Corporation (NYSE:SCHW) soared 0.1% with the increase of 0.05 points closing at the price of $48.63. Flex Ltd. has currently decrease -42.09% in its stock over the period of 6-months while its rival The Charles Schwab Corporation subtracted -18.21% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Flex Ltd. (NASDAQ:FLEX) is 9.3% while the ROI of The Charles Schwab Corporation (NYSE:SCHW) is 1.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FLEX’s EBITDA Margin is 7.39 whereas SCHW’s is NOT AVAILABLE.

Both the profitability ratios suggest a mixed sentiment for Flex Ltd. (NASDAQ:FLEX) and The Charles Schwab Corporation (NYSE:SCHW).

EPS & Surprise Factor

Flex Ltd. (NASDAQ:FLEX) reported $0.29/share EPS for the previous quarter where analysts were predicting an EPS to be $0.28/share Thus beating the analyst Estimates with a Surprise Factor of 3.6 Percent. While, The Charles Schwab Corporation (NYSE:SCHW) reported EPS of $0.65/share in the last quarter. The analysts projected EPS of $0.65/share depicting a Surprise of 0 Percent.

Taking a look at Earnings per Share, Flex Ltd. tends to be beating the analyst estimates more than The Charles Schwab Corporation. so FLEX is more profitable than SCHW.

Technical Analysis of Flex Ltd. & The Charles Schwab Corporation

Moving average convergence divergence (MACD) shows that Flex Ltd. (NASDAQ:FLEX) is on a PRICE RELATIVITY trend While The Charles Schwab Corporation (NYSE:SCHW) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Flex Ltd. was in BULLISH territory and The Charles Schwab Corporation was in BULLISH territory.

FLEX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SCHW’s candle is BULLISH with HIGH.

EPS Growth Rate: FLEX’s 15.37% versus SCHW’s 27.31%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Flex Ltd. (NASDAQ:FLEX) is predicted at 15.37% while The Charles Schwab Corporation (NYSE:SCHW) stands at 27.31%. These numbers suggest that SCHW is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of FLEX stands at 1.2 while SCHW is at 0 whereas the debt ratio of the prior is 0.94 while the debt ratio of the later is 11.89.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.3 for FLEX and 2.3 for SCHW which means FLEX has Hold rating whereas SCHW has Hold rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for FLEX is $13.2 which is 35.08% of its current price while SCHW has price target of 56.81 which is 14.4% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

FLEX currently has price to earning P/E ratio of 15.2 whereas SCHW has 21.79 while the forward P/E ratio for the prior stands at 7.01 and for the later it depicts the value of 16.82.

The price to Book P/B for FLEX is 1.46, Price to Sale is at 0.17 and for SCHW these ratios stand at 3.79 and 6.3.